Bank Foreclosure Fraud Settlement with the State Attorneys General: How Much Trickles Down to Help South Florida Homeowners? Not Much.

The joint task force investigating foreclosure fraud by banks and mortgage servicers in this country, which brought together the top attorneys for each state in the country, i.e., their Attorneys General, has made a settlement deal according to a news release by the AGs. From their joint task force’s web site:

After many months of negotiation, 49 state attorneys general and the federal government have reached agreement on a historic joint state-federal settlement with the country’s five largest loan servicers:

Ally/GMAC

Bank of America

Citi

JPMorgan Chase

Wells Fargo

The settlement will provide as much as $25 billion in relief to distressed borrowers and direct payments to states and the federal government. It’s the largest multistate settlement since the Tobacco Settlement in 1998.

The agreement settles state and federal investigations finding that the country’s five largest loan servicers routinely signed foreclosure related documents outside the presence of a notary public and without really knowing whether the facts they contained were correct. Both of these practices violate the law. The settlement provides benefits to borrowers whose loans are owned by the settling banks as well as to many of the borrowers whose loans they service.

From their news release:

Under the agreement, the five servicers have agreed to a $25 billion penalty under a joint state-national settlement structure:

Servicers commit a minimum of $17 billion directly to borrowers through a series of national homeowner relief effort options, including principal reduction. Servicers will likely provide up to an estimated $32 billion in direct homeowner relief.

First things first, there isn’t an agreement yet. There’s an intent to sign a settlement agreement – which as any lawyer worth his salt will tell his client doesn’t mean much. The opera’s not over till the fat lady sings, and the deal’s not done until the signatures are signed and notarized on the final paperwork. So, while this may well turn into a final deal, there’s still the chance that things will change. It’s not finished.

Second, this doesn’t offer much help to many individuals out there. If anyone in South Florida is expecting widespread justice or a check in the mail to make them whole from the AG-Bank deal, then they are wrong. The terms as provided in the news releases aren’t providing big bucks and they aren’t impacting millions of American home owners.

Today, the best thing for individuals to do remains this: to educate themselves on the rights and remedies available to them under state law and to then pursue them aggressively in their own individual foreclosure case.

If you have questions or comments, please feel free to Chat with Larry in the comments below, at info@hallandalelaw.com or (954) 458-8655.

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These articles are for informational purposes only and should not be relied upon as legal advice. Florida law is constantly changing. Therefore, we strongly recommend talking with a Florida real estate lawyer to learn your rights.